Global Markets Enter Holiday-Shortened Week With Cautious Tone Amid Policy and Geopolitical Crosscurrents

Index Update :  Losses in semiconductor and some consumer discretionary stocks weighed on markets Friday, despite broader resilience. Attention now turns to upcoming labor data, including ADP payrolls, and the Federal Reserve’s December meeting minutes. Although the Fed cut rates earlier this month, it signaled only one further reduction in 2026, highlighting ongoing inflation concerns. Meanwhile, minimum wages are set to rise in 22 U.S. states this year, with most increases effective January 1. Geopolitically, focus remains on Ukraine after Donald Trump said talks with President Zelensky had moved peace efforts “a lot closer,” though key disputes persist.

Market Movers :  On Friday, the top gainers were A SPAC III Acquisition Corp. (+78.91%), followed by Paranovus Entertainment Technology Ltd. (+37.34%). On the contrary, Ascent Solar Technologies, Inc (-21.37%), and SuperX AI Technology Limited. (-17.13%) declined the most the same day.

Commodities Update  :  WTI and Brent crude futures each climbed over 1% on Monday—above $57 and $61 per barrel, respectively—recovering some of the prior session’s losses as traders weighed escalating Middle East tensions and signs of progress in Ukraine peace talks. Hopes for stronger demand were also supported by China’s plans to increase fiscal spending in 2026. Despite the rebound, both benchmarks remain on track for annual declines of more than 20% amid expectations of a global supply surplus next year.

Gold and silver prices retreated sharply on Monday as traders took profits following record highs, even as geopolitical risks continued to provide some safe-haven support. Gold slipped below $4,490 per ounce after a stellar year—up more than 70%—driven by central-bank buying, ETF inflows and expectations of Fed rate cuts. Silver dropped over 5% toward $74 per ounce after touching $81, though it remains on track for a huge annual gain amid strong speculative demand and ongoing supply constraints.

Copper prices eased to about $5.6 per pound after briefly hitting fresh records, as markets questioned whether the recent rally driven by supply-shortage fears had gone too far. Still, the metal is set for strong monthly and yearly gains, supported by constrained production—highlighted by disruptions at Freeport-McMoRan’s Grasberg mine—and robust structural demand from electrification and AI-related infrastructure investment.

Macro Updates :  The U.S. dollar slipped below 98 on Monday, hovering near three-month lows in thin holiday trading as investors continued to price in rate cuts next year. While markets still expect two reductions in 2026, most Fed officials see only one, keeping uncertainty elevated ahead of Tuesday’s FOMC minutes. The currency is also being pressured by political factors, including expectations for a new Fed Chair announcement in early 2026 and concerns over tariff and policy risks. As a result, the dollar is set for a 2025 decline of more than 9%, its worst annual fall since 2017.

Bonds Commentary  :  The 10-year U.S. Treasury yield slipped to about 4.14% in light holiday trading as investors continued to price in rate cuts next year. Markets currently expect two reductions in 2026, though Fed officials largely foresee only one. Strong Q3 GDP data has reinforced confidence in economic growth, limiting expectations for aggressive easing. Attention is also turning to President Trump’s upcoming decision on a new Fed Chair in early 2026, while investors look ahead to Tuesday’s FOMC minutes for further policy signals.

Futures Update :   U.S. stock index futures slipped in early Monday trading, as investors took a more cautious stance heading into another holiday-shortened week following the market’s late-year rally. S&P 500 futures were down 0.2% at 6,964.0, Nasdaq 100 futures had declined 0.4% to 25,761, while Dow Jones futures were little changed at 48,991.

Stocks exhibited a momentum upwards after the opening but gradually corrected and consolidated at break even levels throughout Friday's trading day. The major averages showed a consolidation after their winning streak to five consecutive days, with both the Dow and S&P 500 near new record highs. The S&P 500 went down by 2.09 points, or 0.03%, closing at 6,929.95. From a technical perspective, the index found support at important levels and steadily advanced, indicating the potential for a sustained upward trend in the near term. The 14-day Relative Strength Index (RSI) has crossed above the midpoint, further supporting a positive outlook. Key support levels are around 6,844, while resistance is anticipated near 6,988.